All the things you need to consider when buying a home

We often hear that buying a property is the most important, and the biggest purchase you're ever likely to make.

The view of personal financial adviser Warren Ingram is that, if you're going to stay in your chosen home for eight years or longer, it's then that you should really think about buying as opposed to renting.

RELATED: The great property debate: Should you rent or buy your home?

"There are a lot of people in South Africa who just can't get away from bricks and mortar; it's the thing they want to buy more than anything else so we need to help them think about it."

It's a long-term commitment, usually tying you down in mortgage terms for at least 20 years, so guard against emotions clouding your decision, he says.

Before you allow yourself to get emotionally involved with a specific property, you must have a good idea of the financial implications of what you're going to do and make sure you've done your homework.

UPFRONT COSTS ARE BIGGER THAN YOU MAY THINK

• There are lawyers' fees for the legal transfer of ownership and registering a bond on the property.
• Transfer duty, which is a tax, can be millions if you buy a high-value home. If your home costs more than R1,1m, you are going to pay transfer duty.
• Even if you get a 100% bond, you should try to put down a deposit. This reduces the monthly payments and saves you years of interest.
• For a R2m property, all these costs could be around R120,000.
• For a R5m property, the total could be around R500,000.

CHECK THE MONTHLY COSTS ON THE PROPERTY 

• Your bond repayment is only part of your monthly expenses - it is important to know the other costs you will be paying every month.
• Property rates are paid to the local municipality
• Levies are paid to the Body Corporate or Home Owners Association if you live in an apartment or estate
• Insurance must be paid for the building and the items inside

You should budget a monthly amount for maintenance costs, Ingram advises. Even if you live in an apartment, you still need to maintain the interior, for example the carpets and cupboards, painting the walls.

THE DEPOST DEBATE

When interest rates are low, 8% or less, you might decide to pay off your bond slowly and increase your investment contributions because the growth on investments in shares should be closer to 11%.
If interest rates are high, paying extra money into the bond is the same as getting a guaranteed tax-free return on your money.
Your personal preference is also important. Some people hate debt and will save most of their extra money in the bond so that they become debt-free as fast as possible.

Make sure you always have an emergency fund of 6 months' expenses to cover unforeseen property costs, says Ingram. This can be stored in your mortgage.

To hear Ingram's detailed advice, listen to the interview audio at the top of the article